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Bank
A banker or bank is a financial institution that acts as a payment agent
for customers, and borrows and lends money. In some countries such as
Germany and Japan banks are the primary owners of industrial
corporations while in other countries such as the United States banks
are prohibited from owning non-financial companies.
The first modern bank was founded in Italy at Genoa in 1406, its name
was Banco di San Giorgio (Bank of St. George).
Banks act as payment agents by conducting checking or current accounts
for customers, paying cheques drawn by customers on the bank, and
collecting cheques deposited to customers' current accounts. Banks also
enable customer payments via other payment methods such as telegraphic
transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current account,
accepting term deposits and by issuing debt securities such as banknotes
and bonds. Banks lend money by making advances to customers on current
account, by making installment loans, and by investing in marketable
debt securities and other forms of lending.
Banks provide almost all payment services, and a bank account is
considered indispensable by most businesses, individuals and
governments. Non-banks that provide payment services such as remittance
companies are not normally considered an adequate substitute for having
a bank account.
Banks borrow most funds borrowed from households and non-financial
businesses, and lend most funds lent to households and non-financial
businesses, but non-bank lenders provide a significant and in many cases
adequate substitute for bank loans, and money market funds, cash
management trusts and other non-bank financial institutions in many
cases provide an adequate substitute to banks for lending savings to.
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